Gandhinagar

India’s first International Financial Services Centre (IFSC) at GIFT City near here became operational today and Finance Minister Arun Jaitley unveiled rules and regulations for this global financial hub.

Jaitley also attacked the previous UPA government for being “lethargic” in giving permission to the IFSC.

“Luckily, as soon as the government changed, things started moving fast and the new government has given all the due permissions. As a result, IFSC has now formally become operational from today. I am confident it will provide a huge lift to the economy of Gujarat as well as of the country,” he said.

The regulations are aimed at creating a vibrant IFSC on the lines of those in Dubai and Singapore and check the flight of trading in rupee and Indian securities to such offshore financial hubs.

IFSC rules allow companies incorporated outside India to raise money in foreign currencies by issuance and listing of their equity shares on stock exchanges within the IFSC, where individual and institutional investors from India and abroad, including NRIs, would be allowed to trade.

The IFSC regulatory regime allows Indian and foreign stock exchanges to set up separate bourses within IFSC as subsidiaries, while market entities from India and abroad would be allowed to operate there by providing issuance and trading in depository receipts and debt securities of domestic as well as overseas companies.

The capital and other requirements have been relaxed for some time for exchanges, clearing corporations and depositories to set shop in the IFSC.

Mutual funds and Alternative Investment Funds set up in the IFSC can also invest in the securities listed there.

Speaking at a conference on `Regulatory Framework for IFSC in India’, Jaitley said proposal for IFSC had been sent to UPA government by the state in 2011, but “due to the lethargic attitude of that government, we have to wait for three years to realise that idea” and it “contributed in bringing down India’s growth rate”.

SEBI Chairman U K Sinha, RBI deputy governor R Gandhi, IRDAI Chairman T Vijayan, Gujarat Chief Minister Anandiben Patel and Gujarat Finance Minister Suarabh Patel were also present.

Sinha in his speech said IFSC is a major milestone for the Indian economy, as investors and businessmen will not have to go to global financial services hubs such as Dubai or Singapore anymore.

“In recent times, we are noticing that many new start-ups are coming in India. However, they are threatening to go to other countries to raise capital, which they are finding it difficult to do in India. There should be a facility for them to do that while staying in India,” he said.

“Further, through this IFSC, we want to allow NRIs to invest in foreign currencies. In addition, they can also raise money in foreign exchange from India through IFSC,” he said.

Jaitley hailed the GIFT City as a role model. “GIFT City is a three-phased project. At present, first phase is completed. It is based on a futuristic planning. It can serve as a role model for smart cities coming up in other states,” he said.

Jaitley also said there was “new enthusiasm” under the NDA government at the Centre.

“We are seeing new enthusiasm under the new government. A state like Madhya Pradesh, once called as Bimaru, is having double digit growth. The agricultural growth of MP stands at impressive 20 per cent,” he said, adding that the Narendra Modi government is doing everything to attract new investment.

“We are having an enormous task ahead. That is why, we have opened our doors for new investment. We are also easing our processes to invite people to invest in India. We are also working towards making our tax regime internationally compatible to attract investors,” said Jaitley.

PTI